Manila Standard Today – Drilon takes over Recto’s sin tax job

Senator Franklin Drilon, a staunch ally of President Benigno Aquino III, was named chairman of the Senate ways and means committee Tuesday, and vowed to come up with a sin tax bill that came closer to the P60 billion in extra revenue the Finance Department wants.

Drilon replaces Senator Ralph Recto, who resigned from the post Monday and withdrew his version of the bill that slashed the expected revenues from new taxes on cigarettes and alcoholic beverages to P15 billion.

Recto resigned after a Palace official said senators who did not support the administration version of the bill would be suspected of accepting bribes from the tobacco and alcohol companies, a charge he denied.

The Senate called a caucus Tuesday to determine what to do about Recto’s resignation.

“With much regret, we place on record the resignation of Senator Ralph Recto as chairman of the Senate committee on ways and means. And in consonance with the Senate rules, we designate the vice chairman, Senator Franklin Drilon as chairman of the committee,” Senate President Juan Ponce Enrile said.

Recto stayed away from the caucus Tuesday, but sent a letter to Majority Leader Vicente Sotto III apologizing for his absence and reiterating the withdrawal of his version of the sin tax bill.

He said the withdrawal would give the new chairman a free hand in drafting a new version of the bill.

Senator Ferdinand Marcos Jr. blamed the Executive department for Recto’s resignation, saying it had pressured him into quitting because he didn’t do as it wanted.

“We simply cannot do our work if we are looking over our shoulder and hoping that whatever we write in our committee report will be agreeable to the Executive department. If we do that we might as well go home and be just the rubber stamp that they seem to want us to be,” Marcos said.

Marcos said he was not against the Executive department expressing its opinion.

“What I do find repugnant is that the Executive can cause a committee chairman to withdraw his committee report because they do not agree with this… and furthermore, that they caused the committee chairman to resign.”

Asked if Recto’s much-criticized report on the sin tax bill could be used, Drilon replied that it could be the basis for debates, and that amendments could be later introduced.

He added that he had signed the committee report and indicated he intended to introduce amendments to the bill.

“My agreement with Senator Recto is that even if I did not agree with his conclusion and his rates, we agreed that the vice chairman of the committee will submit to the floor the amendments at the appropriate time,” Drilon said.

He said the target was to release the Senate version of the bill by mid-November.

Asked how much he wanted the new sin taxes to raise, Drilon answered: “Closer to P60 billion.”

Despite his resignation, Recto continued to draw fire from anti-smoking non-government organizations.

In a privilege speech on Monday, Recto said he did not mind if the groups pushing for higher sin taxes received lobby money from a foundation funded by New York City Mayor Michael Bloomberg.

On Tuesday, the group Health Justice slammed Recto for casting malice on Bloomberg’s involvement in the anti-smoking campaign.

“Recto singled out Mayor Bloomberg as a funding source but didn’t say New York City’s lung cancer rates have dropped dramatically,” said Evita Ricafort of the Health Justice group.

“He [Recto] wants to ‘help’ consumers by providing affordable access to an addictive product that kills? That’s hardly good for consumers and is far from public service.”

On the Senate floor, Senator Pia Cayetano, chairman of the committee on health and demography, acknowledged the tobacco control programs of the Bloomberg Initiative worldwide and said the Philippines, being a poor country, should welcome much-needed assistance from international organizations.

Her remarks were apparently aimed at answering criticism from Enrile and Recto that foreign organizations were interfering in local legislation.

The Bloomberg Initiative to Reduce Tobacco Use is an effort implemented by no less than the World Health Organization, the health arm of the United Nations system, of which the Philippines is a member, she said.

Another group, New Vois Association of the Philippines, a group of cancer survivors, said lobbying by the tobacco industry, not by Bloomberg, was the problem.

“We thank Recto for resigning and withdrawing his report but he needs to realize that tobacco industry lobbyists are the problem and not Mayor Bloomberg who is only helping the Philippines and not gaining anything from it,” said Emer Rojas of New Vois.

In the House, opposition lawmakers expressed disappointment over Recto’s resignation.

Zambales Rep. Milagros Magsaysay, Isabela Rep. Rodolfo Albano, and Siquijor Rep. Orlando Fua said that Recto should have stood by his version of the bill and not succumb to external pressures.

“Senator Recto should not have resigned. He did his job diligently,” Magsaysay told the Manila Standard.

“Even with pressure from Malacanang, he should have stuck to his committee report because the senators signed it,” Magsaysay added.

Albano said Recto was on the right track when he pushed for the three-tier taxation system for the so-called sin products because this would benefit the people.

Albano said that Congress should be able to pass a version of the sin tax measure which also takes into consideration the alternative livelihood for the country’s tobacco farmers once the bill is enacted.

European businessmen said on Tuesday that the flow of investments to the Philippines from Europe might be affected if the enactment of the sin tax law did not adhere to a ruling by the World Trade Organization on a uniform liquor tax.

“We are watching it very closely,” Henry Schumacher, executive vice president of the European Chamber of Commerce in the Philippines, said in a press briefing in Makati.

Schumacher said the European Chamber did not support the sin tax proposal because it was not in line with the WTO ruling.